Press Release

BOSTON, Mass.--(BUSINESS WIRE)--Oct. 30, 2014--
Verastem, Inc. (NASDAQ: VSTM), focused on discovering and developing
drugs to treat cancer by the targeted killing of cancer stem cells,
reported financial results for the third quarter ended September 30,
2014, and also provided an overview of certain corporate accomplishments
and plans.

“We ended the third quarter with $93.4 million in cash, cash equivalents
and investments, which we anticipate will fund our clinical programs
into the first half of 2016,” said Robert Forrester, President and Chief
Executive Officer of Verastem. “I am encouraged by the progress we are
making with our clinical programs.”

“We continue to see promising clinical signals from the VS-6063 program,
as evidenced by the recently announced data from the Window of
Opportunity study in surgically-eligible patients with mesothelioma, in
which we saw a reduction in a marker of cancer stem cells and
encouraging signs of clinical activity,” said Dr. Joanna Horobin, Chief
Medical Officer of Verastem. “In addition, accrual to our
registration-directed COMMAND study for patients with mesothelioma is
progressing well.”

Verastem has multiple ongoing trials targeting cancer stem cells
including the COMMAND study which is evaluating VS-6063, the Company’s
lead focal adhesion kinase (FAK) inhibitor, in patients with malignant
pleural mesothelioma. Malignant pleural mesothelioma is an aggressive
form of cancer that occurs in the mesothelium, the thin layer of tissue
that covers the lungs. The incidence of mesothelioma is growing
worldwide and the survival rate for these patients is very poor.

Pursuing simultaneous development in the US, EU, Japan, Canada,
Australia and South Africa

COMMAND is now open in 12 countries worldwide

An interim analysis is expected midyear 2015

“Window of Opportunity” study

Single agent treatment with VS-6063 for 12 days in patients with
malignant pleural mesothelioma prior to surgery

Presented preliminary data at the 12thInternational
Mesothelioma Interest Group (iMig) Conference in October 2014

VS-6063 treatment reduced FAK activity (pFAK-Y397) by an
average of 70% in patients evaluated to date

VS-6063 reduced a cancer stem cell marker in post-treatment
biopsies in 5 out of 7 patients with evaluable paired biopsies

Measurement of tumor size using RECIST modified for
mesothelioma by CT/PET confirmed that there was no progression
of disease while on the 12 day treatment with VS-6063 in any
of the 10 patients. Moreover, 2 patients achieved tumor
shrinkage consistent with a partial response (-30% and -49%)

VS-6063 was well tolerated

A protocol amendment has been submitted to expand the study to
include an additional 10-15 patients and increase the
treatment period from 12 to 35 days

Presented data at iMig demonstrating the synergistic activities of
VS-5584 and VS-6063 in cellular and animal models of mesothelioma.

Expect to initiate a study evaluating the combination of VS-5584
and VS-6063 in patients with relapsed or progressive malignant
pleural mesothelioma in Q1 2015

Corporate Events

Third Annual Research and Development Day

Members of the Verastem leadership team, along with a panel of
experts, provided in-depth reviews of the Company’s development
programs targeting cancer stem cells with a focus on VS-6063. The
webcast of the presentation can be viewed here: http://bit.ly/1t5F34Z

THIRD QUARTER 2014 FINANCIAL RESULTS

As of September 30, 2014, Verastem had cash, cash equivalents and
investments of $93.4 million compared to $123.7 million on December 31,
2013. Verastem used $9.3 million for operating activities in the third
quarter ended September 30, 2014 (the “2014 Quarter”).

Net loss for the 2014 Quarter was $13.3 million, or $0.52 per share, as
compared to net loss of $10.6 million, or $0.44 per share, for the same
period in 2013 (the “2013 Quarter”). Net loss includes stock-based
compensation expense of $2.8 million for the 2014 Quarter and 2013
Quarter.

Research and development expense for the 2014 Quarter was $9.0 million
compared to $6.8 million for the 2013 Quarter. The $2.2 million increase
from the 2013 Quarter to the 2014 Quarter was primarily related to an
increase of $2.4 million in contract research organization expense for
outsourced biology, chemistry, development and clinical services, which
includes Verastem’s clinical trial costs, an approximate $517,000
increase in personnel costs primarily due to increased headcount, an
approximate increase of $237,000 in occupancy expense partially due to
the relocation to its new facility and an approximate $181,000 increase
in consulting fees. These increases were partially offset by an
approximate $765,000 decrease in license fees related primarily to the
Poniard and S*Bio milestones incurred in the 2013 Quarter and an
approximate decrease of $280,000 in lab supplies partially due to lower
activity as Verastem transitioned to the new facility.

General and administrative expense for the 2014 Quarter was $4.3 million
compared to $3.9 million for the 2013 Quarter. The approximately
$400,000 increase from the 2013 Quarter to the 2014 Quarter primarily
resulted from an increase of approximately $241,000 in personnel costs
primarily related to increases in salaries and headcount, an increase in
consulting fees of approximately $90,000 primarily related to
preparation for commercialization and an increase in stock-based
compensation of approximately $71,000 due to an increase in stock option
grants.

The number of outstanding common shares as of September 30, 2014, was
25,878,418.

Financial Guidance

Based on current operating plans, we expect to have sufficient cash,
cash equivalents and investments to fund our research and development
programs and operations into the first half of 2016.

About VS-6063

VS-6063 (defactinib) is an orally available compound designed to target
cancer stem cells through the potent inhibition of focal adhesion kinase
(FAK). Cancer stem cells are an underlying cause of tumor resistance to
chemotherapy, recurrence and ultimate disease progression. Research
by Robert Weinberg, Ph.D., scientific cofounder and chair of Verastem’s
Scientific Advisory Board, and Verastem has demonstrated that FAK
activity is critical for the growth and survival of cancer stem cells.
VS-6063 is currently being studied in the registration-directed COMMAND
trial in mesothelioma (www.COMMANDmeso.com),
a “Window of Opportunity” study in patients with mesothelioma prior to
surgery, a Phase 1/1b study in combination with paclitaxel in patients
with ovarian cancer, and a trial in patients with Kras-mutated non-small
cell lung cancer. VS-6063 has been granted orphan drug designation in
the U.S. and EU for use in mesothelioma.

About VS-4718

VS-4718 is an orally available compound designed to target cancer stem
cells through the potent inhibition of focal adhesion kinase (FAK).
VS-4718 is currently being studied in a Phase 1 dose escalation study in
patients with advanced cancers.

About VS-5584

VS-5584 is an orally available compound that has demonstrated potent and
highly selective activity against class 1 PI3K enzymes and dual
inhibitory actions against mTORC1 and mTORC2. In preclinical studies,
VS-5584 has been shown to reduce the percentage of cancer stem cells and
induce tumor regression in chemotherapy-resistant models. Verastem is
currently conducting a Phase 1 dose escalation trial of VS-5584 in
patients with advanced solid tumors.

About COMMAND

COMMAND is a registration-directed, double-blind, placebo-controlled
trial of VS-6063 in patients with malignant pleural mesothelioma. The
primary endpoints of COMMAND are progression free survival (PFS) and
overall survival (OS). VS-6063 targets cancer stem cells which are an
underlying cause of tumor progression and recurrence. The design of
COMMAND allows the opportunity to enrich for patients with tumors low in
the biomarker, merlin. Preclinical and early clinical research has
demonstrated that low merlin levels may be predictive of increased
effectiveness of FAK inhibitors such as VS-6063. The COMMAND study
stratifies patients to evaluate the effect of VS-6063 in both the
overall patient population and the subgroup of patients whose tumors are
low in merlin.

COMMAND is expected to enroll approximately 350-400 patients at clinical
sites in 12 countries, including the US, UK, Japan, Australia, Canada,
South Africa, New Zealand and countries in mainland Europe. Eligible
patients who had a partial response or stable disease following standard
first-line therapy with platinum/pemetrexed will be stratified to merlin
low or high and then randomized to receive either placebo or 400 mg of
defactinib. For more information visit www.COMMANDmeso.com.

About Verastem, Inc.

Verastem, Inc. (NASDAQ:VSTM) is discovering and developing drugs to
treat cancer by the targeted killing of cancer stem cells. Cancer stem
cells are an underlying cause of tumor recurrence and metastasis.
Verastem is developing small molecule inhibitors of signaling pathways
that are critical to cancer stem cell survival and proliferation: FAK,
PI3K/mTOR and Wnt. For more information, please visit www.verastem.com.

Forward-looking statements:

This press release includes forward-looking statements about the
Company’s strategy, future plans and prospects, including statements
regarding the development of the Company’s compounds, including VS-6063,
or defactinib, VS-4718 and VS-5584 and the Company’s FAK inhibition
program, PI3K/mTOR and diagnostics programs generally, the timeline for
clinical development and regulatory approval of the Company’s compounds,
the expected timing for the reporting of data from ongoing trials, the
structure of the Company’s planned or pending clinical trials and the
Company’s estimates of how long its existing cash, cash equivalents and
investments will fund operations. The words “anticipate,” “appear,”
“believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,”
“project,” “target,” “potential,” “will,” “would,” “could,” “should,”
“continue,” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements
contain these identifying words. Each forward-looking statement is
subject to risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such statement.
Applicable risks and uncertainties include the risks that the
preclinical testing of the Company’s compounds and preliminary or
interim data from clinical trials may not be predictive of the results
or success of ongoing or later clinical trials, that data may not be
available when we expect it to be, that enrollment of clinical trials
may take longer than expected, that the Company will be unable to
successfully complete the clinical development of its compounds,
including VS-6063, VS-4718 and VS-5584, that the development of the
Company’s compounds will take longer or cost more than planned, and that
the Company’s compounds will not receive regulatory approval or become
commercially successful products. Other risks and uncertainties include
those identified under the heading “Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2013 and in
any subsequent SEC filings. The forward-looking statements contained in
this press release reflect the Company’s current views with respect to
future events, and the Company does not undertake and specifically
disclaims any obligation to update any forward-looking statements.

Verastem, Inc.

Unaudited Selected Consolidated Balance Sheet Information

(in thousands)

September 30,

December 31,

2014

2013

Cash, cash equivalents and investments

$

93,366

$

123,656

Prepaid expenses and other current assets

1,110

643

Property and equipment, net

2,885

631

Other assets

522

331

Total assets

$

97,883

$

125,261

Accounts payable and accrued expenses

$

8,160

$

7,087

Other liabilities

912

728

Stockholders’ equity

88,811

117,446

Total liabilities and stockholders’ equity

$

97,883

$

125,261

Verastem, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

Three months endedSeptember 30,

Nine months endedSeptember 30,

2014

2013

2014

2013

Operating expenses:

Research and development

$

9,047

$

6,789

$

25,763

$

18,130

General and administrative

4,341

3,855

13,846

11,879

Total operating expenses

13,388

10,644

39,609

30,009

Loss from operations

(13,388

)

(10,644

)

(39,609

)

(30,009

)

Interest income

56

53

193

131

Net loss

($13,332

)

($10,591

)

($39,416

)

($29,878

)

Net loss per share applicable tocommon stockholders–basic anddiluted

($0.52

)

($0.44

)

($1.54

)

($1.37

)

Weighted-average number ofcommon shares used in net lossper
share applicable to commonstockholders-basic and diluted

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